Budget Considerations for Medical Facilities

Updated on October 26, 2020
Budget Considerations for Medical Facilities

When it comes to healthcare, cost is one of the primary concerns facing citizens today. This doesn’t only extend to patients, but also to hospitals and other medical facilities trying to provide quality care while still making ends meet. In order to provide the best care to patients while still monitoring costs, these budget considerations for medical facilities should be kept in mind.

Be Wary of Silo Budgeting

With all the divisions and departments in hospitals, silo budgeting can seem like the simplest, most efficient option. However, there are times when providing separate budgets for individual departments can work against the hospital’s greater purpose. Discussing finances with financial advisors can help shed light on the true impact of traditional budgeting choices, and can help you make a decision that will best serve your facility.

Consider Renting Medical Equipment

Medical equipment is essential for providing quality patient care, but the cost of purchasing quality medical equipment to meet patient demands is high. This cost doesn’t only include upfront costs but the cost of maintaining this equipment as well. Some medical facilities have found a solution by renting medical equipment. Not only are they able to obtain new equipment at a lower cost, but they are sometimes able to acquire lower-cost service contracts.

Examine Readmission Rates

On average, readmissions cost hospitals 43 billion dollars annually, including penalties enacted by organizations like Medicare for hospitals with high readmission rates. Examining readmission rates is an important budget consideration for medical facilities trying to lower costs. Identify conditions that put patients at risk for readmission, such as congestive heart failure, pneumonia, and bronchiectasis, and provide follow up care to these patients to help them monitor and care for their conditions.

Financial Assistance in the Emergency Room

By law, patients who visit the emergency room with a serious or life-threatening condition, or who are giving birth must receive treatment regardless of insurance or ability to pay. This is an important ethical mandate, but it can cost hospitals a significant amount of money. Rather than turning patients away, hospitals should make themselves aware of the public funding options available for patients without insurance and should work with patients who qualify.

In most businesses, cost is simply a matter of meeting your bottom line, but for hospitals, it can make a big difference in the quality of care patients receive. Because of this, facility managers need to take budgeting as seriously as other tasks. This can help mitigate the cost issues that patients and hospitals face in our country today.